Wednesday, 12 March 2014

Ecobank board ousts CEO Thierry Tanoh, names deputy as head

The board of Ecobank removed its chief executive, Thierry Tanoh,
on Tuesday following months of turmoil at one of the biggest financial
institutions in sub-Saharan Africa.

The crisis over corporate governance and
leadership that led to Mr Tanoh's departure is seen as a test case for
regulators and has put a spotlight on the integrity of financial
institutions on a continent where economies are expanding rapidly.

Ecobank named deputy CEO Albert Essien as its new
chief executive. It also announced the reinstatement of finance director
Laurence do Rego, which was a demand by Nigeria's securities regulator,
which is investigating alleged breaches of corporate governance.

"Ecobank Transnational Incorporated today
(Tuesday) announces the departure of Group CEO Mr Thierry Tanoh with
effect from 12 March 2014. Effective the same date he will no longer be a
director of ETI," the bank's holding company said in a statement.

Mr Tanoh could not immediately be reached for comment.

Mr Tanoh's supporters have said he was under
pressure because of his drive to expose and correct abuses of corporate
governance that pre-dated his tenure, which attracted powerful enemies
nervous of what he might uncover.

Mr Essien, who is from Ghana, has been at Ecobank for more than 20 years and rose to deputy group CEO two years ago.

The 12-member board made its decision at a meeting
in Yaounde, the capital of Cameroon, a senior bank official said. Mr
Tanoh did not attend.

The Ivorian took the reins as CEO in January 2013,
having previously served as a vice president at the International
Finance Corporation, the investment arm of the World Bank.

Ecobank is based in Togo and has a presence in 35
African countries. There are few other pan-African banks, and the
continent's biggest financial institutions are based in South Africa.

Under Mr Tanoh, profits grew 56 per cent in the
first nine months of last year, and his defenders said those results
reflected his leadership qualities.

But his tenure was also marked by a row over his
bonus and by an investigation launched last August by Nigeria's
Securities and Exchange Commission (SEC) after Ms do Rego told the
regulator that Mr Tanoh had pressured her to misstate 2012 financial
results.

Ecobank denied that allegation and said Ms do Rego had previously been suspended in a dispute over her qualifications.

The SEC in January criticised what it said was an
absence of clear vision and strategy at the bank, inadequate
transparency in recruiting and conflicts of interest.

It also demanded that Ms do Rego be reinstated as a whistleblower, something the bank said would be against Togolese law.

Last week, shareholders at an extraordinary general meeting
voted to implement reforms designed in part to answer the regulator's
criticism. In an apparent snub to Mr Tanoh, they also told the board to
reinstate Ms do Rego.

A senior Ecobank official played down the impact of the crisis on the bank.

"It's obviously caused people to be a bit
concerned, but if you look at the share price it is slightly down this
year, but it is still much higher than at the end of 2012," the official
said.

Boardroom battle

Mr Tanoh's position as CEO was undermined by a
series of defections from the board at a bank that had attracted little
adverse publicity under the long tenure of its previous CEO, Arnold
Ekpe.

"This (Mr Tanoh's departure) was just a matter of
time. I expect a positive response in terms of the market's view of
Ecobank's corporate governance," an institutional investor said,
declining to be named.

Four executives on Mr Tanoh's top five-person
committee wrote on February 13 to interim chairman Andre Siaka to say Mr
Tanoh should resign to solve a crisis of leadership.

That email was sent by Mr Essien, who was
executive director of corporate and investment banking in addition to
his duties as deputy CEO.

On March 1, non-executive board member Daniel
Matjila denounced Mr Tanoh in a letter to Mr Siaka and the board,
calling for his contract to be terminated immediately. Mr Matjila
represents South Africa's Public Investment Corporation, the bank's
largest shareholder with 18.35 per cent.

His letter had the support of two other board
members, which had amounted to a total of seven who came out publicly to
oppose Mr Tanoh before Tuesday's meeting.